Big companies have kept large sums of profits overseas in tax-friendly countries for years now, a practice that saw Apple CEO Tim Cook in front of the US Senate earlier this year. Apple is said to have more than $100 billion in cash stashed overseas where it is not subject to US taxes.
The company's Ireland-based holding company AIO (Apple Operations International) pays no US income taxes and is subject to an extremely low tax rate there, but according to a new report from Ireland's Department of Finance, changes might be on the horizon.
The report details Ireland's tax strategy along with a proposal containing potential alterations to the country's 2014 Finance Bill, that according to some, suggest that Apple's tax benefits could be on the way out. The Department of Finance notes that it will consider changes to its "company residence rules aimed at eliminating mismatches — that can exist between tax treaty partners in certain circumstances — being used to allow companies to be ‘stateless' in terms of their place of tax residence."
The move is said to be part of Ireland's continued cooperation with the European Union and The Organisation for Economic Co-operation and Development (OECD) on corporate tax issues. The report from the Department of Finance also talks about the country's efforts at dissolving what it calls "aggressive tax planning," a corporate practice the department says causes a lot of issues for global legislators.
Reports say the changes in question likely won't come into effect until January 2015, if they do indeed make their way into the 2014 Finance Bill.
(Image via Reuters)